Fiat Reports Loss but Expects to Return to Profit in 2010

Jan. 25, 2010
Key to future success is government incentives to buy green

Fiat on Jan. 25 reported a higher-than-expected net loss in 2009 but forecast a return to profit this year as long as European governments continue to offer incentives to buy green.

The automaker announced a net loss of 848 million euros (US$1.2 billion) in 2009 compared with a profit of 1.721 billion euros the previous year.

The loss is the first for the Italian icon since its return to profit in 2005 under its dynamic new boss Sergi Marchionne, credited with turning the company around after four straight years in the red.

The group forecast a net profit of between 200 million and 300 million euros in 2010, "subject to continued availability of eco-incentives in the European automotive market," it said.

Schemes such as "cash-for-clunkers" bonuses for swapping in petrol-guzzling cars for more fuel-efficient models will help Fiat achieve a turnover of between 52 billion and 53 billion euros, Fiat said. Without such programs, turnover would be some 2.5 billion euros less, it said.

The group put the loss down to restructuring costs and write-downs related to the "strategic realignment with Chrysler" last year, when the Italian group obtained a 20% stake in the ailing automaker in exchange for access to Fiat technology.

Fiat posted a fourth-quarter 2009 loss of 283 million euros compared with a net profit of 180 million euros a year earlier.

"After a particularly difficult 2009, with uneven trading conditions across the groups international scope of operations, 2010 is positioning itself as a year of transition and stabilization," the statement said.

Copyright Agence France-Presse, 2010

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